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| Shinsegae Food's frozen pizza production line at Osan 2 production facility / Courtesy of Shinsegae Food |
By Kwak Yeon-soo
Shinsegae Food, which just completed the construction of its frozen pizza production facility south of Seoul, faces a rocky road ahead as consumers are eating premade products less.
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| Shinsegae Food Co-Ceo Seong Yul-ki / Korea Times file |
The fourth floor of the plant is fully equipped with a frozen pizza production line. Not only its own pizza brand "Venu," but also half-cooked pizzas targeted at B2B marketplaces will be produced at the new plant, it said.
Latecomer Shinsegae Food said it will strive to compete with dominant market leaders Ottogi and CJ Cheiljedang, with market shares of 67 percent and 24 percent, respectively.
But the business environment is showing no sign of improvement.
According to Nielson Korea, the frozen pizza market dropped by 32 percent to 29 billion won between January and May 2019 from 42.6 billion won during the same period a year ago.
Ottogi's frozen pizza sales decreased to 16.1 billion won between January and May, down 41.4 percent from a year ago. Its market share declined from 65.4 percent in 2018 to 55.6 percent in 2019.
CJ Cheiljedang's frozen pizza sales fell to 9.4 billion won between January and May, down 13.7 percent from a year ago.
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| Shinsegae Food Co-CEO Kim Un-a / Korea Times file |
"The consumption frequency is low because frozen pizzas are still perceived as a back-up option for when consumers can't have freshly baked pizzas," a Shinsegae Food official said, citing that Nielsen's recent data was based on B2C market research only.
"Since there are only two key players in the market that produce limited types and ingredients, consumer satisfaction has decreased over time."
The company said it will reinforce the B2B market by supplying half-baked pizzas to food franchise companies in addition to introducing 23 new types of pizzas.
"Taking a two-track approach, both B2C and B2B, will enable us to make a turnaround in the frozen pizza market," the official said.
